Newspaper article The Evening Standard (London, England)

Your House Can Fund a Country Retreat

Newspaper article The Evening Standard (London, England)

Your House Can Fund a Country Retreat

Article excerpt

Byline: Lucy Tobin

A"COUNTRY retreat" may sound like something reserved for the very wealthy, but new research reveals that the average homeowner in 21 out of London's 32 boroughs could buy a second property outright outside of the capital.

It may come as no surprise that homeowners in Kensington & Chelsea can buy an average house without a mortgage in 103 out of 111 English and Welsh counties with a mortgage releasing 20% of the value of their home: prices in the borough average [pounds sterling]1,149,283, compared with an average of [pounds sterling]162,621 for England and Wales as a whole.

But soaring values across London and a new kind of equity release mortgage mean second-home ownership or buying an investment property in cash is not just limited to those in London's most expensive boroughs. Land Registry data reveals owners of an average-priced house in nine London boroughs -- including Hackney, Southwark, Wandsworth, Richmond, Camden and Islington -- could buy a typical property in at least a dozen counties by releasing 20% of the value of their home. Residents of average-priced properties in Barnet, Haringey, Harrow, Merton, Tower Hamlets, Brent, Ealing and 14 other London boroughs could also afford to buy a second property without a mortgage in at least one other part of Britain.

Equity release schemes are commonly associated with giving older homeowners the chance to access the value of their property without the need to sell and move out. But a new second home or buy-to-let equityrelease mortgage from Castle Trust has a different market in mind. It offers people who have at least 40% equity in their home to release a fifth of the value, which they can use to purchase a second property without having to make monthly repayments.

There are no rent or interest charges on the loan, but Castle Trust takes 40% of any increase in value on the sale of the property from the date when the equity mortgage was taken out. …

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